The New Yorker Radio Hour

Episode: Andrew Ross Sorkin on What 1929 Teaches Us About 2025

Host: David Remnick | Guest: Andrew Ross Sorkin
Release Date: November 14, 2025

Overview

In this episode, David Remnick interviews financial journalist Andrew Ross Sorkin about the lessons from the 1929 Wall Street Crash and how they parallel today’s economic climate, especially amid major investments in artificial intelligence, rising corporate leverage, and global tariff policies. The discussion explores whether we are on the edge of a new financial bubble and what policymakers, investors, and regular Americans can learn from the past.

Key Discussion Points

Comparisons Between 1929 and the Present (00:44–05:24)

• Economic Anxiety and AI: Remnick begins by contextualizing today’s financial optimism and fears, particularly how current market surges rely heavily on AI investments, echoing the speculative fervor of the late 1920s.
• Investor Euphoria: Sorkin draws direct lines between the "roaring" 1920s—fueled by new technologies like radio and automobiles—and today’s AI-driven boom.
  • Quote: "The 1920s is really what changed the way we live now … this euphoric moment is so similar to the 20s because we had automobiles, we had telecommunications, we had radio. People thought RCA was the Nvidia of its time." (03:19, Sorkin)
• Crisis Timing: The perennial challenge is not just recognizing a bubble but getting the timing right.
  • Quote: “It’s not just knowing that there’s going to be a correction of some sort or a crash. It’s getting the timing right and knowing when to get on, off and on the train again.” (10:26, Sorkin)

The Role of Leverage and Shadow Banking (05:24–09:48)

• Excessive Borrowing in AI Buildout: Sorkin warns that immense leverage underpins the current AI arms race—tech companies, energy, and real estate are all taking on risky debt to enable AI infrastructure, echoing dangerous patterns of the past.
  • Quote: "Every financial crisis, if I learned anything from covering 1929, covering 2008, it is leverage. It is people borrowing to make all of this happen." (05:55, Sorkin)
• Opaque Finance: Unlike past crises where borrowing was visible through banks, much current debt is hidden in the "shadow banking" system and private credit funds.
  • Quote: "Today, most loans are not coming from the banks anymore. They're coming from what's called the shadow banking system … There's no disclosure around it. We don't know about these funds." (08:18–08:43, Sorkin)

Market Risks and the AI Bubble (09:48–15:05)

• AI as the Growth Engine: Sorkin relays economist Jason Furman’s view that if all current spending on AI/data centers vanished, US growth would stagnate—demonstrating how dependent the economy is on this sector.
  • Quote: “If you were to eliminate all of the spending on data centers … the United States would have a growth rate of about 0.1%. Call it flat.” (11:15, Sorkin)
• How Bubbles Persist: Despite optimism, Sorkin cautions the current bubble could burst or simply continue evolving for years before unraveling, much like previous speculative eras.

Individual Investment Advice & Psychological Realities (09:48–13:58; 32:06–33:55)

• Staying in the Market vs. Holding Cash: Sorkin advises caution for those close to retirement but maintains that, historically, being a "professional optimist" pays off in the long run.
  • Quote: "If you have 30 years from now and you don't need the money, I like to believe that 30 years will be better 30 years from now than today." (13:21, Sorkin)
• Personal Position: Due to journalistic ethics, Sorkin only owns mutual funds, not individual stocks.
• Practical Tips: Suggests retirees keep 10–20% of assets liquid given market risks, but younger investors with long time horizons shouldn't panic.

The Political Economy: Tariffs, Industrial Policy, and Inequality (15:05–20:34)

• Tariffs and Industrial Policy: Sorkin critiques ongoing US tariffs, especially on cars, as efforts to sustain industries that might otherwise fail—questioning their long-term wisdom.
  • Quote: “We’re trying to prop up industries and parts of our economy through tariffs that economically naturally shouldn’t be propped up.” (15:08, Sorkin)
• Competition with China: Acknowledges Chinese EVs (e.g., BYD) surpass American offerings in quality and price, raising existential questions for US manufacturing.
• Business Elite Sentiment: The financial elite, once opposed to tariffs, are slowly accepting them as permanent fixtures of a de-globalizing world.
  • Quote: “…Irrespective of what you think, the Supreme Court is going to do, that tariffs are now here to stay … that the next decade or two decades likely means that tariffs are going to be here.” (19:24, Sorkin)

Social Inequality and the Future of Capitalism (20:34–31:21)

• Populism and Perceptions of Capitalism: Remnick notes Trump’s ability to harness resentment over inequality; Sorkin contends elites are theoretically aware of this but struggle to genuinely act on it.
  • Quote: “I think they think about it and then try not to think about it. … The sweet meats are too delicious.” (23:35, Sorkin)
• Conspicuous Consumption: Today’s ultra-rich are far more ostentatious than in the 1920s, possibly exacerbating social resentments.
• American Dream as Lottery: The current era markets a lottery-ticket fantasy rather than gradual advancement, fueling disillusionment.
• Tax Reform Proposals: Sorkin suggests reforms to estate and capital gains taxation, and controversially, a tax on large-scale philanthropy to reduce tax avoidance.
  • Quote: “I would even think about a tax on philanthropy. … Most people who are giving their money to philanthropy today that are wealthy get a break, get a huge break.” (31:19, Sorkin)

Policy, Guardrails, and Systemic Risk (25:12–27:47)

• Parallels with Past Leaders: Sorkin compares Trump’s tariffs to Hoover’s Smoot-Hawley tariffs—both used protectionist policies for political gain with damaging effects.
• Who Governs the Economy? The markets themselves may be the most powerful check on presidential impulses.
  • Quote: “The president’s maybe worst impulses seem to be improved when Scott Bessen gets in the room. … It may very well be that the market is his guardrail.” (27:01, Sorkin)

The Next Generation and “Affordability Crisis” (28:11–30:00)

• Youth Disillusionment: Many young people now favor “socialism” over “capitalism,” reflecting deep doubts about opportunity and class mobility.
  • Quote: “It’s about what the American dream even is and whether you think you can do better than your parents … right now … what’s being sold … is very much this lottery ticket, get rich quick fantasy.” (28:11–28:29, Sorkin)

Notable Quotes & Memorable Moments

• On AI Spending:
  “If you were to eliminate all of the spending on data centers, effectively all the money that's going to Nvidia … the United States would have a growth rate of about 0.1%. Call it flat.” (11:15, Sorkin)
• On Wealth and Inequality:
  “I think they think about it and then try not to think about it. … The sweet meats are too delicious.” (23:35, Sorkin)
• On Being a Cautious Optimist:
  “It has paid a lot more to be a professional optimist. And that is the hardest part about this.” (33:55, Sorkin)
• On Tariffs Becoming Permanent:
  “There's a sense … that tariffs are now here to stay, that the world is moving in this direction of breaking globalization.” (19:24, Sorkin)
• On American Dream as Lottery:
  "What's being sold on the scroll of the American dream, whatever that is, is very much this lottery ticket, get rich quick fantasy. It is not this idea that if you do all the right things … it's gonna work out." (28:29, Sorkin)

Important Timestamps

| Timestamp | Segment Highlights | |-----------|-------------------| | 00:44–05:24 | Framing today’s economy vs. 1929; AI-driven euphoria | | 05:24–09:48 | Leverage, shadow banking, and systemic risk in AI construction | | 09:48–13:58 | Stock market psychology, timing bubbles, investment advice | | 15:05–20:34 | US industrial policy, tariffs, and China competition | | 20:34–24:44 | Inequality, elite attitudes, historical comparisons | | 25:12–27:47 | Leadership, guardrails, and the lessons of 2008 vs. 1929 | | 28:11–31:21 | Millennial/Gen Z disillusionment, tax reform, vision for capitalism | | 32:06–33:55 | Practical investment approach for different life stages |

Tone and Takeaways

The conversation is measured but critical, blending Sorkin’s financial expertise with Remnick’s incisive questions. The mood is cautionary—history may not repeat, but it certainly rhymes. Sorkin does not foresee immediate doom, but he warns that excessive leverage, overconfidence in technological revolutions, and persistent inequality make today’s exuberance fragile.

Main takeaway:
While today’s AI boom echoes the speculative excesses of 1929, and the invisible leverage behind it should concern us, history suggests optimism pays for patient investors—though caution is wise, especially for those close to retirement. Systemic reform, transparency in credit markets, and greater attention to inequality are urgently needed to avoid the mistakes of the past.